Another Good Faith Estimate

The Consumer Protection Bureau is thinking about overhauling the Good Faith Estimate they introduced just 18 months ago because even that seem too difficult for most to understand. Heck, it’s been a year-and-a-half and I’m just starting to like it and understand what the CPB was trying to get at with GFE2010. Of course it takes the government to take a 1 page Good Faith Estimate form and turn it into a 3 page document.

According to a survey conducted by ING Direct consumers polled about the new GFE had this to say:

  • More than one in three (36 percent) homeowners described the GFE as being “complicated” or a “waste of time.”
  • 68 percent of homeowners surveyed were unable to correctly identify the purpose of the “Title Services” charge on the GFE. In other words they didn’t know what they were paying for.
  • 53 percent of homeowners spent 30 minutes or less reading and reviewing the GFE.
  • One in ten (11 percent) homeowners never even looked at the document their loan officer sent them.

As a loan officer the things I get asked the most are:

  1. What is my interest rate?
  2. What is my payment?
  3. How much cash do I have to bring to the closing?

#3 is not addressed on the current GFE2010 or either of the two new documents being proposed. #3 is VERY important also. In many purchase transactions the seller pays all of the borrowers closing costs so all the borrower needs to bring to the closing table is their down payment. It would be good to know that, huh? I usually end-up sending the “Fees Worksheet” (the old Good Faith Estimate) along with the GFE2010 because it addresses all the above and breaks the fees out into easier to understand terms than the new one.

Unlike last time though, this time the CPB is asking our opinion on what is easiest to understand and what we’d like to see. Check-out the two finalist forms in PDF format then vote for the one that makes most sense to you. You can also add notes after you vote if you feel the form is missing some information you feel is important to the loan disclosure and shopping process.

See the new forms here:

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